Strengths, weaknesses, opportunities and threats analysis of Cambodia’s innovation system

UNDP (2020), Adaptation and Adoption of Industry 4.0 in Cambodia

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Strengths

Economic trends

·         Growing economy with increasing trade and foreign direct investment (FDI) flows.

Business support

·         Increasing support for SMEs, e.g. Biz info system and the SMEs bank initiative.

Infrastructure

·         University initiatives of labs and research centres.

Education, skills and labour

·         Demographic dividend, people under 35 years of age represents approx. 70% of the population;

·         Wide use of smartphones among the population;

·         Knowledge of English;

·         Competitive labour costs.

Institutional framework

·         Government initiatives are emerging to strengthen the capabilities of the national innovation system, e.g. the Skills Development Fund, the Entrepreneurship Development Fund and the e-government policy;

·         Special Economic Zones;

·         Political stability.

International collaboration

·         Partnerships between local stakeholders and international organisations;

·         Students and faculty exchanges with foreign universities.

Markets

·         Access to markets through free trade agreements with ASEAN+3 and other countries in different regions.

Weaknesses

Infrastructure

·         Limited infrastructure, equipment and human resources in higher education institutions;

·         Limited and unstable power supply infrastructure;

·         Costly Internet and limited coverage area.

·         Inadequate road connections.

Education, skills and labour

·         Outdated education programmes;

·         Limited public and private investment in education and training;

·         Lack of technology-related jobs;

·         Shortage of semi-skilled and highly skilled labour.

Innovation capabilities and access to knowledge

·         Limited R&D investment due to budget constraints;

·         Limited capacity regarding data privacy and security;

·         Low interaction between different innovation actors;

·         Low technological absorptive capacity in most of the SMEs;

·         High dependence on foreign technology;

·         Lack of awareness of the benefits of new technologies.

Access to investment capital and finance

·         Constrained access to capital for local enterprises.

Institutional framework

·         Low intellectual property protection;

·         Inadequate compliance with standards;

·         Need for better coordination between ministries;

·         High transaction costs;

·         Complicated tax and export procedures.

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Opportunities

Education, skills and labour

·         Because of the pressure to catch up with new technologies, the customised curriculum of public education into STEM may be developed and adapted;

·         Skills and knowledge transfer through FDI;

·         Growing demand for technicians and, increasingly, for STEM graduates.

Innovation capabilities and access to knowledge

·         International focus on using technology for development (SDGs);

·         Reductions in production costs and increase in productivity through technology adoption.

International collaboration

·         Long-term cooperation with international partners (university – international agencies);

·         Financial support from Australia to ASEAN member states on capacity-building in digital technologies;

·         Worldwide technology integration.

Markets

·         Shifting in production chains during trade war may increase technology transfer;

·         Growing demand for high-value-added goods.

 

Threats

Uncertain impacts of emerging technologies

·         Cyber threats;

·         Disruptive technology from developed countries may take over local innovation;

·         Job losses in occupations involving repetitive tasks;

·         Negative effects of technology adoption on health;

·         Big companies may disrupt local businesses or even eradicate local infant industries;

·         Adoption of Industry 4.0 technologies may require extensive talented labour from outside.

Education, skills and labour

·         Increasing wages;

·         Intensifying global competition for talent.

Business support

·         Traditional business fails.

Markets

·         Growing competition of emerging economies;

·         Rising cost of raw materials;

·         Decreasing price of finished products, e.g. garments;

·         Potential loss of preferential treatment in international trade.

To read full report (Eng)

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